Interactions between public and private health insurance under moral hazardInteractions between public and private health insurance under moral hazard
- Other Titles
- Interactions between public and private health insurance under moral hazard
- Authors
- 석승훈; 홍지민
- Issue Date
- Dec-2023
- Publisher
- 한국리스크관리학회
- Keywords
- 공적의료보험; 민영의료보험; 도덕적 해이; 후생; public health insurance; private health insurance; moral hazard; welfare
- Citation
- 리스크관리연구, v.34, no.4, pp 77 - 118
- Pages
- 42
- Journal Title
- 리스크관리연구
- Volume
- 34
- Number
- 4
- Start Page
- 77
- End Page
- 118
- URI
- https://scholarworks.bwise.kr/ssu/handle/2018.sw.ssu/48931
- DOI
- 10.21480/tjrm.34.4.202312.003
- ISSN
- 1229-103X
- Abstract
- This study examines how the introduction of private health insurance affects the efficiency of mandatory public health insurance in the presence of moral hazard. First, if all individuals purchase private health insurance (the second-best case), consumer welfare is the same as that in the absence of private insurance, whereas the coverage of public insurance is less than that in the absence of private insurance. Second, if some individuals purchase private health insurance, the following two cases are possible, depending on the proportion of individuals who purchase private insurance: (ⅰ) If the proportion is greater than or equal to a threshold, the public insurer controls their moral hazard, and the coverage of public and private insurance is the same as in the second-best case. (ⅱ) If the proportion is less than the threshold, the public insurer allows their moral hazard. For public insurance, insurance premium is actuarially unfavorable, and the coverage is higher than that of no private insurance. In both (ⅰ) and (ⅱ), the consumer welfare of the individuals who do not purchase private insurance is deteriorated, and the welfare for the individuals who purchase private insurance is at best equal to or less than in the second-best case. These results show that moral hazard needs to be properly controlled by considering the interaction between public and private insurance for the sustainable development of health insurance systems.
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